MotorVac Technologies Inc. Announces Stock Repurchase Program
28 September 1998
MotorVac Technologies Inc. Announces Stock Repurchase Program and Preliminary Operating Results for the Third Quarter of 1998
SANTA ANA, Calif.--Sept. 25, 1998--MotorVac Technologies Inc. Friday announced that its Board of Directors has approved the repurchase of up to an aggregate of 451,492 shares of its Common Stock, approximately 10% of the company's outstanding shares.
"Based on current market prices, we believe that our stock is undervalued and that the repurchase program is a good investment of available funds," said Lee W. Melody, MotorVac's president and chief executive officer.
The repurchases will be made from time to time on the open market at prevailing market prices or in negotiated transactions off the market. The repurchased Common Stock will be used by MotorVac for a stock compensation plan pursuant to which, if sufficient shares are repurchased, participating directors would receive stock in lieu of cash fees and participating officers and employees would receive stock in lieu of up to 10% of their cash compensation. The repurchase program is expected to continue over the next 12 months unless extended or shortened by the Board of Directors.
The company also announced that it anticipates its third quarter 1998 operating results will be lower than expected and show a loss in the range of $0.08 to $0.11 per share. The company continues to experience the effects of actions by its largest distributor (which accounted for over 70% of revenues in 1997) to reduce its inventory levels.
"While we are disappointed that reduced purchases from this distributor have continued longer than expected," according to Melody, "we are hopeful that sales to this customer will improve in the fourth quarter."
Melody continued, "We continue to take aggressive actions to relieve the company's dependence on any one customer. For example, the company recently announced the approval by Mobil Oil Corporation to offer our TRANSTECH(TM) transmission service machine through their automotive products distribution network."
MotorVac Technologies designs, develops, assembles and markets unique technological solutions for the service and repair of automotive fluid systems. Product lines include specialty chemicals and shop equipment for servicing fuel systems and transmission systems. MotorVac's products are distributed to service shops, fleets and government agencies in more than 70 countries worldwide. For additional information, visit MotorVac's Web site at www.motorvac.com.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The company intends that such statements shall be protected by the safe harbor provided for in such sections. In particular, statements regarding future results are subject to the risks and uncertainties that could cause actual results to vary materially from those projected in the forward-looking statements.
The company may experience significant fluctuations in future operating results due to a number of economic, competitive, governmental and technological factors, including, among other things, changes in laws, the size and timing of customer orders, new or increased competition, unexpected increases in expenses, delays in acceptance of new products, product returns, seasonality in product purchases by distributors and end users, and pricing trends in the automotive after-market industry in general, and, in specific, markets in which the company is active.
Any of these factors, or others, could cause operating results to vary significantly from prior periods, and those projected in the forward-looking statements. Additional information with respect to these and other factors which could materially affect the company and its operations is included in the company's filings with the Securities and Exchange Commission, including its Annual Report or Form 10-KSB for the year ended Dec. 31, 1997 and any subsequent filings.